Avoiding Bankruptcy: Why Should I Pay Attention To Detail?
By Andy Miofsky, Illinois Bankruptcy Attorney on Aug 12, 2007 in Illinois
If the offer sounds too good to be true, it probably is. Just because you have an existing relationship with a creditor, do not think you are special. Once a creditor gets in your pocket, you are a legacy, a mark for future business.
I own a Ford Explorer with a loan to Ford Credit. The loan is 3/5ths paid. Today Ford sent me a personal offer. It is designed to make me feel special “because of [my] impeccable payment history”. The offer says straight up, I “qualify for Ford’s lowest advertised rate”; but the fine print at the bottom of the page says “accounts must be in good standing and [my] income must be sufficient”.
Wait, how can my personalized letter state I qualify for the lowest rate based on my excellent payment history, but also say my account and income must be evaluated? So I became suspicious. The letter compares three new car payments, all under my existing payment. And at the bottom of each payment column, there is a bold check mark on the line marked Lower Payment. But what it does not say is more important. It does not say how much I have left on my current loan. In fact, my car will be paid off in two years, but Ford wants to hook me up for five years at more money, because I am special.
And more details in the fine print say “not all buyers will qualify” for the deal. I thought this was my special deal. It also says interest rates “may vary”; so these low payments might not be so low by the time I get my special deal.
I look forward to the day I do not have a car payment, and the lure of a new car is easy to ignore. But for people who buy cars based on the payment, and not the overall cost, this is an effective sales pitch.
Ford pays good money to create sales campaigns like this letter. Ford markets its products in a way designed to get consumers to buy new cars. And Ford is good at what it does. But the first step toward staying out of debt is to study all the terms and not to fall prey to special marketing deals that do not include all the facts.
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